On Tuesday, February 12, 2019, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting in Trenton. Among the actions to be taken, the Board will consider three applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the three applicants could receive over $45,866,400 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

While the Grow NJ program has been wildly popular and incredibly successful, it has been the topic of significant debate, and will likely be modified upon its expiration in July of 2019. Governor Phil Murphy recently outlined his vision for new incentive programs, which would include the creation of the NJ Forward Tax Credit Program (which would take the place of Grow NJ as the State’s main job attraction incentive program) and the NJ Aspire Tax Credit Program (which would take the place of ERG as the State’s main incentive for developers). Below is a more detailed overview of the Governor’s plan.

The NJ Forward Tax Credit Program (NJ Forward) will likely take the place of Grow NJ as the State’s main job attraction incentive program. As proposed, NJ Forward will focus primarily on high-wage, high-growth sectors, including life sciences, information and high tech, clean energy, advanced manufacturing, advanced transportation and logistics, finance and insurance, and food and beverage. While the report does not outline specific programmatic details, it states that the proposed program will:

Prioritize new job creation rather than retained jobs

Encourage job creation in urban centers and other distressed communities, particularly those with public transit assets

Include an annual award cap and review to ensure fiscal sustainability and transparency

Feature lower base per-job credit amounts more in line with neighboring states, as well as more focused bonuses that ensure the administration’s policy goals

Limit transfers of credits to ensure that job-creating companies reap the primary benefits of taxpayer investment

Reward companies that invest in employee skill development and training

The NJ Aspire Tax Credit Program (NJ Aspire) will likely take the place of ERG as the State’s main incentive for developers. The administration is proposing the creation of a new place-based gap financing tool to help catalyze investments in commercial residential, and mixed-use (including parking) projects, with a particular focus on cities, downtowns, and suburban neighborhoods served by mass transit. As proposed, the program will facilitate the conversion of surface parking lots, vacant and/or abandoned lots, and other underutilized properties into job and tax-generating development opportunities. The program will also assist in the development of market-rate housing in distressed communities and, where appropriate, mixed-income and affordable housing near transit in suburban communities. NJ Aspire will be structured as a competitive tax credit grant, giving the NJEDA discretion in awarding grants to the most impactful and development-ready project.

In addition to NJ Forward and NJ Aspire, the Governor has also called for the creation of a new remediation and development tax credit program and a dedicated NJEDA loan fund to support brownfield redevelopment, the creation of a state historic preservation tax credit program, and multiple programs aimed at encouraging venture capital investment in high-growth, high-wage sectors.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Thursday, October 11, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting. Among the actions to be taken, the Board will consider two applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the two applicants could receive over $8,600,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 250 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 250 projects will drive over $4.5 billion in private capital investment, create over 32,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Chris Murphy at (973) 877-6984 or cmurphy@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Thursday, September 13, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting. Among the actions to be taken, the Board will consider four applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the four applicants could receive over $87,000,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 246 projects have received awards, totaling over $4.6 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 246 projects will drive over $4.4 billion in private capital investment, create over 30,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Wednesday, the New Jersey Economic Development Authority (NJEDA) submitted a report to Governor Phil Murphy, conducted by Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, which (among other things) recommended changes to the State’s business incentive programs, including the Grow New Jersey Assistance Program (Grow NJ) and the Economic Redevelopment and Growth Grant Program (ERG).

There has been a significant volume of project approvals under Grow NJ, which are associated with significant volumes of retained and created jobs, but which will also generate a substantial offset to the Corporate Business Tax and Insurance Premium Tax in the years ahead;

Given the long lead time associated with Grow NJ and ERG projects, it is too soon to fully evaluate the impact of these programs on the State’s economy;

Projects approved under Grow NJ are generally concentrated in the northern, more populous counties of the State. A significant percentage of project funding in the eight southern counties has been concentrated in Camden;

Redundancies in the Grow NJ base and bonus award structure are potentially providing more generous incentives than intended by the statute;

Because certain bonuses have been underutilized, it is not clear that the program has advanced certain policy goals intended by the legislation such as clean energy investment and the creation of incubators;

There is an opportunity to improve EDA’s analysis of proposed incentive projects.

The report suggested the following to improve the programs:

A deeper analysis of the types and quality of jobs created or retained, and whether some or all of the related economic activity would have happened with lower or no incentives.

A review of the overall impact of the reduction in Corporate Business Tax revenues (which would be made up for by higher Gross Income Tax from created or retained jobs), given the constitutional requirement that the Gross Income Tax fund property tax relief while the Corporate Business Tax and Insurance Premium Tax are the primary resources for the General Fund.

Given the Grow NJ program’s goals of job creation and retention, the report recommends that the alternative approach used in calculating certain awards in the city of Camden (the “Camden alternatives”) be revised to tie awards more closely to the employment created by these firms.

NJEDA should consider eliminating or revising the bonus for Transit Oriented Development in Urban Transit Hubs and Garden State Growth Zones. This bonus may be redundant in most cases in these jurisdictions, where it accounts for about 21 percent, or about $250 million of the total award value for projects qualifying for the bonus.

The programs are currently set to expire in July 2019. With the sunset of the programs only a year away, legislators will soon start to discuss potential changes to the programs. While change may be on the horizon, one thing is clear--incentives will continue to be part of New Jersey’s economic development toolkit.

If interested in learning more about state and local incentives, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Tuesday, June 12, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting. Among the actions to be taken, the Board will consider two applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the two applicants could receive over $60,000,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 252 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 252 projects will drive over $4.5 billion in private capital investment, create over 30,000 new jobs, and retain over 36,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. With offices in Newark, New Jersey and New York City, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Tuesday, April 10, 2018, the New Jersey Economic Development Authority (NJEDA) will hold its monthly board meeting in Trenton. Among the actions to be taken, the Board will consider seven applications under the Grow New Jersey Assistance Program (Grow NJ). If approved, the seven applicants could receive over $51,000,000 in tax credits (over 10 years).

Created under the Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) is the State’s main job creation and retention incentive program. Under the Grow NJ program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 247 projects have received awards, totaling over $4.7 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 247 projects will drive over $4.5 billion in private capital investment, create over 30,000 new jobs, and retain over 35,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate, development, and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Monday, New Jersey’s Governor signed a bill into law that will affect the ability of certain companies to monetize tax credits under the Grow New Jersey Assistance Program (Grow NJ).

Under the Grow NJ program, the tax credits earned can only be used to offset specific state tax liability, including the State’s Corporate Business Tax (CBT). Generally, only C corporations have CBT liability. Companies structured in other forms (e.g., LLC, LLP, etc.) are required to apply for a tax credit transfer certificate, and sell the tax credits, in order to monetize the incentive. The original Grow NJ legislation created a floor of 75 percent minimum value on the sale, assignment, or transfer of tax credits, and limited the time in which a transferee could use the tax credits to offset liability to three years. Prior to the signing of this law, there was also tax liability associated with the gain or income derived from the sale or assignment of the tax credits at both the federal and state level.

The new law (P.L.2017, c.313.) revises the tax credit transfer certificate provisions under the Grow NJ program, and revises the tax treatment of gains and income associated with the sale or assignment of the tax credit transfer certificates.

First, the new law extends the time period in which transferees can use the tax credits from three years to 20 years, making the time period for redemption identical to the period permitted for the original tax certificate holder.

In addition, the law exempts tax credit transfers to affiliates of the original tax credit holder from the 75 percent minimum value requirement related to the sale or assignment of tax credits.

Lastly, and most importantly, the law excludes the gain or income derived from the sale or assignment of tax credit transfer certificates from taxation at the State level.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 877-6984 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

The New Jersey Economic Development Authority (“NJEDA”) has established new standards under the Grow New Jersey Assistance Program (“Grow NJ”) for businesses seeking to enter into collaborative relationships with colleges and universities in the State of New Jersey.

The new rules were drafted pursuant to a recently passed amendment to the Grow NJ program (ACS for A-4432/SCS for S-2841), with the hopes of encouraging businesses to enter into such collaborative research relationships.

Under the new rules, businesses may qualify for a base tax credit amount of $5,000 per job, per year, if the business locates a qualified business facility (“QBF”) in a Garden State Create Zone, and the facility is used by the business in a targeted industry to conduct a collaborative research relationship with that university.

A Garden State Create Zone is defined as the campus of a doctoral university, and the area within a three-mile radius of the outermost boundary of the campus of a doctoral university. The State currently has 8 doctoral universities, including Montclair State University, NJIT, Princeton University, Rowan University, Rutgers University-New Brunswick, Rutgers University-Newark, Seton Hall University, and Stevens Institute of Technology.

In addition, the new rules establish a bonus of $1,000 per job, per year, if a business (1) is in a targeted industry and locates in a QBF on, or within three miles of, the campus of a college or university other than a doctoral university, and (2) the facility is used by the business to conduct a collaborative research relationship with the college or university. The State currently has 40 non-doctoral colleges and universities (including community colleges) that qualify under this bonus category.

The NJEDA will evaluate prospective research partnerships based on the ability to meet one of four categories:

Direct university collaboration or joint initiative or participation wherein the college or university partners with the business, and may include other business in a similar field of science, to advance an area of science;

Sponsored research wherein the eligible business directly funds a college or university and pays for research to solve a specific problem;

Grants or fellowships wherein funding is provided directly by a business to a professor or graduate student to advance a specific area of science;

Corporate sponsored awards for entrepreneurship wherein a business sponsors an award to be given to a student-developed technology startup or innovation

Created under the Economic Opportunity Act of 2013, Grow NJ is the State’s main job creation and business retention incentive program. The purpose of the program is to encourage economic development and job creation and to preserve jobs that currently exist in New Jersey but which are in danger of being relocated outside of the State.

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 232 projects have received awards, totaling over $4.4 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 232 projects will drive over $3.9 billion in private capital investment, create over 28,000 new jobs, and retain over 30,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 723-7036 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in real estate and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

On Tuesday, multiple bills to amend the Grow New Jersey Assistance Program (Grow NJ) received favorable committee votes in Trenton. The Assembly Commerce and Economic Development Committee voted 9-0 to amend provisions related to the classification of Garden State Growth Zones (GSGZ) under the program. The committee also approved a bill which would require the New Jersey Economic Development Authority (NJEDA) to establish an “innovation zone” program, and modify the Grow NJ program to provide bonuses and other enhanced incentives to high-technology businesses located in an innovation zone.

Under A-4510, the Grow NJ program would be amended to add a sixth GSGZ, which will include the Atlantic City International Airport and the Federal Aviation Administration William J. Hughes Technical Center, and the area within a one-mile radius of the outermost boundary of that airport and technical center.

Currently, there are five GSGZs, including Atlantic City, Camden, Passaic, Paterson, and Trenton. Businesses relocating to or remaining in a GSGZ receive enhanced incentives, including a base tax credit of $5,000 per job, per year, for up to 10 years.

In addition to creating an additional GSGZ, the amendment also allows projects located in the six GSGZs to take advantage of provisions only available for projects located in Camden, including an alternative grant calculation to determine the total incentive amount available. This provision has driven many of the program’s largest projects (and awards) to Camden. As amended, all six GSGZs would be entitled to the same benefits.

The Assembly Commerce and Economic Development Committee also voted 7-0 to approve A-3747, which would require the NJEDA to establish an "innovation zone" program, which would consist of three innovation zones, each surrounding a research university or college or research hospital, and located in Greater Camden, Greater New Brunswick, and Greater Newark. The bill would require the NJEDA, with the approval of the State Treasurer, to modify its existing business assistance programs to give bonuses or other enhanced incentives to high-technology businesses located in an innovation zone.

Created under the Economic Opportunity Act of 2013, Grow NJ is the State’s main job creation and retention incentive program. Under the program, businesses creating or retaining jobs in the State may be eligible for tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (awards vary based on applicable criteria).

The Grow NJ program has been wildly popular and incredibly successful. Since its implementation, 232 projects have received awards, totaling over $4.4 billion in tax credits. Approved applicants generally have three years to certify, or complete, a project. A project is deemed complete when the applicant has hired or retained the number of employees listed in its application, and satisfied the program’s capital investment requirements. Once certified, the 232 projects will drive over $3.9 billion in private capital investment, create over 28,000 new jobs, and retain over 30,000 jobs at risk of leaving the State.

If interested in learning more about Grow NJ or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 723-7036 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in commercial real estate and economic incentive advisory. Headquartered in Newark, New Jersey, the firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.

The Excelsior Jobs Program is a powerful economic development incentive created to provide competitive financial incentives for businesses in New York. Designed to encourage businesses to expand in or relocate to New York, the Program applies to businesses that will create or retain jobs and make significant capital investments.

Generally, the be eligible under the Program, a business must create a specified number of net new jobs, defined as being new to the State, full-time or equivalent to full-time (requiring at least 35 hours per week), and filled for more than six months.

The following strategic businesses located in or planning to locate in New York are eligible under the Program:

Scientific Research and Development businesses creating at least 5 net new jobs

Agriculture businesses creating at least 5 net new jobs

Manufacturing businesses creating at least 5 net new jobs

Back office businesses creating at least 25 net new jobs

Distribution businesses creating at least 50 net new jobs

Music Production businesses creating at least 5 net new jobs

Entertainment Companies creating at least 100 net new jobs

Life Sciences Companies creating at least 5 net new jobs

Other businesses creating at least 150 net new jobs and investing at least $3 million

Businesses in strategic industries that make significant capital investment that have at least 25 employees; manufacturing firms who retain at least 5 employees are also eligible to apply for participation in the program.

Businesses deemed eligible under the Program may qualify for four fully refundable tax credits:

Excelsior Jobs Tax Credit: A credit of 6.85% of wages per net new job.

The Excelsior Jobs Program has been wildly popular and incredibly successful. Since its implementation, over 1,870 applications have been submitted, with 548 projects receiving approval, totaling over $954 million in tax credits being committed. Eligible businesses under the Program have committed to capital investments of over $5.38 billion, research and development expenditures of another $2.84 billion and the creation of 56,826 jobs.

If interested in learning more about the Excelsior Jobs Program or other economic development incentive programs, please do not hesitate to contact Murphy Partners LLP at (973) 723-7036 or info@murphyllp.com.

MURPHY PARTNERS LLP

Murphy Partners LLP is a boutique law firm specializing in commercial real estate and economic incentive advisory. The firm was founded to provide effective, efficient, and creative legal services to meet the distinctive needs of our clients. Through the development of comprehensive legal strategies, our team works tirelessly to create a blueprint for success and advance our clients’ interests in every matter.